Planning and saving for college is the best choice that a parent can make for the future education expenses of their children. Holy Cross encourages all families to investigate carefully the many college savings opportunities available nationally, such as those listed below.
A 529 plan is a tax-advantaged investment plan designed to encourage saving for the future higher education expenses of a designated beneficiary (typically one’s child or grandchild). The plans are named after Section 529 of the Internal Revenue Code and are administered by private organizations and state agencies.
All withdrawals from 529 plans for qualified education expenses will remain free from federal income tax. Many states mirror the federal tax advantages for 529 plans by offering state tax-deferred growth and tax-free withdrawals for qualified higher education expenses.
The Private College 529 Plan, sponsored by nearly 300 private colleges across the country (including the Holy Cross College), is a pre-paid tuition plan. The plan allows families to purchase tuition at today’s prices that can be used at any member school with any increase in value being tax free. The plan protects families from tuition increases and 100% of contributions go toward the purchase of tuition with no fees for account owners.
State Pre-Paid Tuition Plans and State College Savings Plans
Prepaid tuition plans (sometimes called guaranteed savings plans) are currently available in 13 states and allow for the pre-purchase of tuition based on today’s rates and then paid out at the future cost when the beneficiary is in college.
Savings plans are different in that your account earnings are based upon the market performance of the investment. Savings plans may only be administered by states. To learn more about pre-paid tuition plans and college saving plans provided by your state, visit http://www.collegesavings.org/index.aspx
U.S. Treasury Securities
U.S. Treasury securities are a great way to invest and save for the future. Visit http://www.savingsbonds.gov for more information on different ways to invest in U.S. Treasury securities.